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Subject:  Re: childcare credit Date:  11/7/2002  12:26 PM
Author:  MarleysGhost Number:  61963 of 127617

Yes. This is an area that can become quite murky. Employment status issues.

from Circular E (Employer's Tax Guide)..."Generally, a worker who performs services for you is an employee if you can control what will be done and how it will be done. This is so even if you give the employee freedom of action. What matters is that you have the right to control the details of how the services are performed."

then later..."If you have a reasonable basis for not treating a worker as an employee, you may be relieved from having to pay employment taxes for that worker...You (or your predecessor) must not have treated any worker holding a substantially similar position as an employee for any periods after 1977."

So there are loopholes that will get the employer out of paying employment taxes even if the worker falls under the definition of an employee.
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